CFAB DISCHARGE TERMINATION REMEDIES OF CONTRACT

1 Which term best describes a contract, such as a building contract, that provides for payment at various stages of the contractor's progress?

• A A divided contract
• B A segmented contract
• C A severable contract
• D A partial contract

2 Abigail agrees to let her flat to Xavier for one day for the purpose of viewing a carnival. Xavier pays her a £50 deposit with £80 due to be paid at the end of the carnival. Due to civil unrest, the government prohibits all street entertainment and the carnival is cancelled just before Xavier is due to travel to the flat. Neither party has incurred any costs (save for payment of the deposit) in performance of the contract. Applying the Law Reform (Frustrated Contracts) Act 1943, which of the following statements is correct?

• A Abigail can keep the deposit but cannot claim the balance
• B Abigail can keep the deposit and Xavier is liable to pay the balance
• C Abigail must pay back the deposit and Xavier need not pay the balance
• D Abigail can keep the deposit and Xavier must pay an additional £15 so that each party bears an equal losS

3 Are the following statements true or false?Anticipatory breach may be implied from conduct and need not be explicit.

• A True
• B False

3 Where an innocent party elects to treat a contract as discharged, they waive the right to claim damages from the party in default.

• C True
• D False

4 Monster Mowers Ltd agrees to sell one of its ride-on mowers to Geoff in the knowledge that Geoff is taking on new customers from Percy, a commercial gardener, who is retiring and that Geoff is unable to cope with the increased workload with his present mower. The company fails to deliver the mower until 10 days after the due date for delivery and Geoff is forced to continue working with his old mower as best he can. As a result he is unable to complete all the contracts he has agreed with Percy's old customers. He is also unable to accept an offer from the local botanical gardens to be their grass-cutting contractor for the next 12 months because he cannot begin work immediately. Which of the following statements best describes the legal position of Monster Mowers Ltd?

• A The company would be entitled to assume that Geoff could perform his contracts without the new mower and will not be liable for damages as a result
• B The company will be liable for damages in respect of breaches of Geoff's contracts with existing customers but not the new customers from Percy's business
• C The company will be liable for damages in respect of breaches of Geoff's contracts with all his customers but not in respect of the botanical gardens' potential contract as this was not a normal loss and the company was not aware of it
• D The company will be liable for damages in respect of breaches of contract with all his customers and for the lost contract with the botanical gardens since this was a reasonably foreseeable part of Geoff's business plans with his new mower

5 The claimant is required to take every opportunity to mitigate their loss arising as a consequence of a breach of contract.

• C True
• D False

6 Henry agreed to advertise the services provided by his father's business, The Complete Service Ltd, in appropriate publications over a period of 24 months. It was agreed that Henry would be liable to pay a sum of £5,000 in respect of any advertising error or missed deadline. Which of the following describes this contractual provision?

• A A liquidated damages clause
• B An unliquidated damages clause
• C An exclusion clause
• D A penalty clause

7 James contracted to buy a rare sports car from Jeremy for £23,000 but refused to take delivery as agreed. Jeremy, who had recently bought the car for £20,000, was able to sell the car to Richard for £24,100, but sued James for breach of their contract. Which of the following best describes the legal position?

• A Jeremy is entitled to recover £23,000 from James, that being the agreed contract price and there being no excuse for James' breach
• B Jeremy is entitled to nominal damages only since he has been able to sell the car for greater profit
• C Jeremy is entitled only to recover from James the £20,000 that he had in fact paid for the car himself since he was able to sell the car on for profit following the breach by James
• D James is no longer in breach of contract because Jeremy has mitigated his loss totally

8 Siegfried employs Marij to plan and build a go-kart course on his field which he intends to open to the public on 1 May. His viability and market research studies lead him to expect that he will earn £300 per day in the first three months of business. Marij contracts to construct the course and surrounding areas according to certain plans and specifications and to complete the work by no later than 30 March for a contract price of £10,000. The contract provides that Marij will be liable to pay Siegfried £150 for every day work overruns the scheduled completion date. Which of the following best describes the legal position?

• A The provision is for unliquidated damages and is valid because it is less than the anticipated loss
• B The provision is for liquidated damages and is valid because the figure is not penal in nature and protects Siegfried's legitimate interest
• C The provision is void because it states a sum in excess of 1% of the total contract price
• D The provision is likely to be void because the same amount is payable regardless of the actual loss

9 Which of the following statements in relation to contractual remedies is incorrect?

• A Specific performance is awarded at the discretion of the court where damages would not be an adequate remedy
• B Specific performance is likely to be more appropriate than damages in a contract involving personal services
• C Specific performance is likely to be awarded in a contract for the sale of land
• D A mandatory injunction often has the same result as specific performance but is less common